Benson Introduces Proposed 2015-16 Budget

The Benson Board of Commissioners discussed the 2015-2016 proposed budget during its last meeting Thursday night. Town Manager Matt Zapp presented the numbers and addressed questions including several in reference to the ongoing town-wide installation of “smart” electric and water meters.

The recent agreement between Duke Energy and the North Carolina Eastern Municipal Power Agency (NCEMPA) to purchase the generating assets of 32 communities including Benson was a major factor in shaping this year’s budget proposal, explained Mr. Zapp.

Coupled with the town’s new meter installations, Benson’s utility infrastructure — once known for high electricity rates — will soon see a rate reduction and technological overhaul that has long been overdue, he said.

Benson’s proposed budget for 2015-2016 is approximately $10.9 million, reflecting a decrease over last year’s approved budget of just more than $12 million.

Tax Rate/General Fund

The expected property valuation for the 2014-2015 fiscal year is approximately $264 million. The town’s tax rate remains at 53 cents per $100 valuation, the same as last year’s rate.

Regarding General Fund revenues, three payments in lieu of taxes are reflected in the numbers — $13,250 for the Benson Housing Authority, $12,970 for the Electric Fund and $75,000 for the Water and Sewer Fund.

A series of “large ticket” items were included in the General Fund calculation for the upcoming budget, explained Mr. Zapp, several of which were struck from last year’s budget.

A total of $383,698 in fund balance was factored to balance the draft budget — some of those items found within the numbers include $75,000 for code enforcement, $115,000 for a comprehensive storm water study, $52,000 for two police cruisers, $15,000 for carpet inside the Town Hall Conference Center and $16,102 toward the Benson Fire Department budget.

Garbage/Recycling

The proposed budget also includes an increase in the garbage and recycling collection rate to counteract a 3 percent Consumer Price Index (CPI) adjustment from Waste Industries. Earlier this year, the town entered into a new garbage collection contract with Waste Industries.

The new deal included three 95-gallon cans for recycling, trash and yard debris at each household as well as stick collection and bulk item pickup — something the town had previously been responsible for.

The Waste Industries contract brought the town garbage and recycling rate to $22 per month — the 2015-16 budget seeks to increase that to $22.66 to account for the CPI, however, the higher rate would not be implemented until January 2016.

Water/Sewer

Water and sewer rates were suggested to remain stagnate for the 2015-2016 fiscal year as “base charges and volumetric rates currently support the needs of the Water and Sewer Fund,” detailed Mr. Zapp.

The Water-Sewer Fund revenue is based on approximately 635,000 gallons per day (gpd) consumption of water and approximately 600,000 gpd consumption of sewer — the same as last year’s approved budget.

Likewise, water rates are proposed to remain the same — a $10 base charge and $4.29 per 1,000 gallons for customers inside Benson town limits and a $12 base charge and $6.93 per 1,000 gallons for those outside town limits.

Benson’s base sewer rates are currently $10 for those inside town limits and $12 for residents outside town limits. The per gallon sewer rate is $5.29 per 1,000 gallons inside town limits and $8.96 per 1,000 gallons outside.

In addition, provisions for $298,020 in Water-Sewer Fund debt service on the following projects were also included — $45,550 for Dogeye Road annexation, $18,743 for an aerial sewer line at the Waste Water Treatment Plant (WWTP), $42,730 for repairs of the sanitary system, $10,800 for Phase I of the Water System project, $36,865 for Phase II of the Water System project, $28,085 for new two-way meters and a $115,247 expansion loan for the WWTP.

Personnel

Benson’s proposed budget for the upcoming fiscal year doesn’t include any new positions, explained Mr. Zapp, but it does account for two recent hires — filling the vacant finance director position and fully funding the creation of the permit technician position.

Three full-time positions in the public works department have also been permanently reduced due to automated meter reading and the subcontracting of townwide lawn mowing. Former temporary workers held the positions, the budget noted.

Additionally, a merit-based adjustment in salary was also included for town employees for 0-3 percent with a performance evaluation. Town staff is currently working to solidify a renewed benefits contract for employees — a plan is expected to be presented to commissioners during the town’s first June meeting.

Electric Rates/NCEMPA

The proposed Electric Fund budget is $4.6 million — a decrease of $778,703 over fiscal year 2015. The reduction is a result of the ongoing Duke Energy and NCEMPA asset merger, which is anticipated to close later this month.

Benson commissioners made the motion to officially support the merger in late May — the last step in a lengthy approvals checklist that has included state and federal agencies. The remaining communities under the NCEMPA umbrella have passed or are anticipated to pass similar approvals.

Benson officials have kept a watchful eye on talks between Duke and NCEMPA since June of last year — holding regular closed session meetings to discuss the acquisition and adjust the town’s future plans.

The current debt owed by NCEMPA members is approximately $1.9 billion. After the sale — for $1.2 billion and liquidating certain bond reserve funds — Power Agency communities will share responsibility for a dramatically reduced debt of approximately $480 million.

“A conservative approach has been taken in respect to power purchased and electric charges,” explained Mr. Zapp in his budget message as Benson anticipates an 18 percent reduction in wholesale power purchase costs.

Currently, a full cost of services study is under way, continued Mr. Zapp, to better understand the affects of the merger and exactly how rates should be adjusted to reflect the savings. Study results should be in by December of this year.

“Retail rate relief is expected to occur no later than Jan. 1, 2016,” the report notes.

Building on the traction of the NCEMPA merger, Mr. Zapp included details of the ongoing smart meter rollout in Benson.

Using new software and brand new meter technology, Benson will be able to more accurately control its grid and offer an overall better experience to its businesses and residents — including extensive usage data for both electric and water, available via online portal or smartphone app to Benson customers in early 2016.

The new meters are currently being installed throughout town — as of Thursday, 252 electric meters and 55 water meters had been installed and were already being monitored within the town’s new billing software. Full deployment of the town’s new $970,000 meter grid is expected in August of this year.

The required public hearing for the budget has been scheduled for June 9, however, the process can be extended until the second monthly commissioners meeting on June 25 if needed.